It's tempting to say that Target (TGT) just out-executed everyone else this quarter.
And you'd be right if you did.
With 4.8% comps and a 42% growth in digital, Target has cracked the retail code that Nordstrom (JWN) , Macy's (M) and Urban Outfitters (URBN) couldn't. CEO Brian Cornell crushed it -- the others got crushed, and it is entirely possible, despite the outsized yields, that there's more fallout to come.
As someone who is trying to make sense of things, I did believe that the stocks of the losers, going in, reflected the possibility of still-greater losses and the stocks of the winners reflected the winning ways.
That was wrong.
We spent a lot of time explaining to Action Alerts Plus members how we felt about the relative valuation of Kohl's (KSS) and how we expected a weak quarter. But when you get it -- and it is really weak, it does feel like the end of the world. The sequence of events, though -- with Target reporting after what are now the ne'er do wells -- is pretty shocking, shockingly positive for Target and negative for everyone else.
This market is of one mind. Endless punishment for the losers and endless praise for the winners, with the only exception being a comment from management that says the tariffs are too hard to handle.
Brian Cornell, the man who runs Target, does seem to know how to do all of the "pick-up, buy one, get at store or home" hocus pocus.
How? He's just better, the stores are better, the systems are better, the customer acquisition is better, the excitement is better, the convenience is better -- and, well, he's better.
I wish I could say there's more to it. There isn't. Now you just have to think how far behind the other guys are -- and can they ever catch up.
I still think Kohl's can. Macy's and Nordstrom, not clear.
Either way, it doesn't matter. It's winner take all, loser take none when it comes to investing in retail.
Cornell's taking all.